Apple's new iPad constrained by Retina display supply, 'sound labor practices'
Analyst Shaw Wu with Sterne Agee aimed to quash some investor concern on Wednesday that demand for the new iPad is waning. That's not true, he said, as his checks within Apple's supply chain have found that the company continues to have strong interest in its latest touchscreen tablet.
Instead, he said, it's supply of the new high-resolution Retina display that has limited shipments of the latest iPad. He expects that situation to improve over the coming quarters, as additional production lines and suppliers are added.
Samsung is currently believed to be the primary supplier of Retina displays for the new iPad. Both LG and Sharp were said to have initially struggled in making the high-resolution screens for Apple, but recently began small-volume shipments.
Another factor in iPad supply, Wu said, has been the fact that Foxconn is now "conforming to more sound labor practices." Last month, following an independent audit by the Fair Labor Association, Apple's manufacturing partner Foxconn agreed to fix a number of violations that were discovered, including excess working times by its factory employees.
"This is in an effort to improve working conditions," Wu said. "From our understanding, the irony is that many employees prefer to work more overtime."
Some Foxconn workers publicly questioned last month why their hours were being cut after the review conducted by the FLA. Foxconn reduced employee working hours to 49 per week, including overtime, but the change will also result in smaller paychecks for workers.
Because iPad production has apparently been slowed by factors other than demand, Wu has opted to raise his estimates for sales in the current quarter. He now sees Apple having sold 12.3 million iPads in the already-concluded March quarter, up from his previous forecast of 11.5 million.
Wu also sees Apple selling a total of 63 million iPads in calendar 2012, up from an earlier prediction of 60 million. He has also raised Sterne Agee's price target for AAPL stock to $750, up from $740.
64 Comments
Well, yeah. Stupid labor organizations. It's the same as the people who think giving tractors to Africa is the right thing to do.
Some Foxconn workers last month why their hours were being cut after the review conducted by the FLA. Foxconn reduced employee working hours to 49 per week, including overtime, but the change will also result in smaller paychecks for workers.
Gee -where were the ivory tower investigators when I worked in a shipyard in Louisiana that required a minimum of 54 hours/week?
Oh, that's right. Who would expect paper whiners to get their hands dirty by getting near someplace where folks are actually working for a living? If they showed up inside a factory - it wasn't for a summer job; but, maybe a summer internship.
This might be more interesting if the 'prediction' were coming from someone who had a history of getting things right. As it is, Wu has one of the worst records of any of the analysts who follow Apple.
This might be more interesting if the 'prediction' were coming from someone who had a history of getting things right. As it is, Wu has one of the worst records of any of the analysts who follow Apple.
Wu, Munster and Piecyk, the three stooges.
Where was any verified claim made that hours had already been cut?
I'm sure some employees may be concerned about what will happen at some point in the future, and I've seen some articles about that, but where did FoxConn say the policy would be changed immediately and hours are already cut?
The articles posted on it, even here at AI, say that FoxConn plans to put corrective policies in place by July of 2013, more than a year away.
http://www.appleinsider.com/articles...fla_audit.html
I think analyst Wu isn't paying close enough attention.